Merrill v. Allen (In re Universal Clearing House Co.)
UNPUBLISHED
See 185.pdf
Trustee asserted adversary claims against salesmen for Ponzi scheme debtors, claiming that commissions defendants had received from debtors were fraudulent under 11 U.S.C. § 548(a)(2). The court determined that the first three elements of a § 548(a)(2) fraudulent conveyance were not in question and, therefore, the only issue before it was whether defendants had given less than reasonably equivalent value in exchange for debtors' payments. The court held, as a matter of law, that services rendered on behalf of a Ponzi scheme, even if performed in good faith and without any knowledge of fraud, are without legally cognizable value, and awarded judgment to trustee. On appeal, in 185.pdf, this decision was remanded by the district court for a factual determination of the value of defendants' services, and whether they were "reasonably equivalent" to the payments defendants received.